Category Archives: OECD

OECD reports on the failure of trickle-down economics

The Guardian reports: The west’s leading economic thinktank on Tuesday dismissed the concept of trickle-down economics as it found that the UK economy would have been more than 20% bigger had the gap between rich and poor not widened since the 1980s.

Publishing its first clear evidence of the strong link between inequality and growth, the Paris-based Organisation for Economic Cooperation and Development proposed higher taxes on the rich and policies aimed at improving the lot of the bottom 40% of the population, identified by Ed Miliband as the “squeezed middle”.

Trickle-down economics was a central policy for Margaret Thatcher and Ronald Reagan in the 1980s, with the Conservatives in the UK and the Republicans in the US confident that all groups would benefit from policies designed to weaken trade unions and encourage wealth creation.

The OECD said that the richest 10% of the population now earned 9.5 times the income of the poorest 10%, up from seven times in the 1980s. However, the result had been slower, not faster, growth. [Continue reading…]


The Israeli exception

At Foreign Policy in Focus, John Feffer draws attention to the contradiction between Israel’s behavior as a rogue state and the fact that it is about to be granted the privileged status of membership in the Organization for Economic Cooperation and Development — unless, that is, a country such as Turkey steps up and exercises its right to cast a veto.

North Korea and Israel have a lot in common.

Neither is a signatory to the Nuclear Non-Proliferation Treaty (NPT), and both employ their nuclear weapons in elaborate games of peek-a-boo with the international community. Israel and North Korea are equally paranoid about outsiders conspiring to destroy their states, and this paranoia isn’t without some justification. Partly as a result of these suspicions, both countries engage in reckless and destabilizing foreign policies. In recent years, Israel has launched preemptive strikes and invaded other countries, while North Korea has abducted foreign citizens and blown up South Korean targets (including, possibly, a South Korean ship in late March in the Yellow Sea).

And they’re both exceptions in their regions: Israel is a Jewish state in an Arab region; North Korea is an old-style feudal dictatorship in an Asian region marked by relative prosperity and political openness. But the two countries often behave as if they are exceptions to all other rules as well. For instance, they both share an antipathy toward human rights organizations that attempt to hold them to international standards. Witness the recent attacks by Israel (and its hard-right supporters) of Human Rights Watch because of reports critical of Israel’s human rights record. North Korea also routinely rejects human rights inquiries as a challenge to its sovereignty. (For a proposal on a better strategy to engage North Korea on human rights issues, check out my latest piece Starting Where North Korea Is.)

Despite these similarities, these two roguish powers haven’t had a great deal of interaction. Between 1992 and 1994, Israel secretly negotiated a billion dollar buy-out of North Korea’s missile export program to the Middle East, and the United States intervened to nix the deal (only to explore a similar option with North Korea at the end of the Clinton administration). In 2007, Israel bombed a suspected nuclear facility in Syria that may or may not have been built with North Korean assistance. Otherwise, the two countries maintain their innocence and distance.

And yet one country is an official rogue and the other country only plays one on Arab TV. The difference in designation owes much to U.S. policy. One of the perks of world domination is the chance to make like Adam in Genesis and name all the animals. North Korea, according to Washington, is beyond the pale. Israel, however, is “one of us”: firmly ensconced in the Judeo-Christian tradition, accorded honorary European status, and even considered worthy of membership in the Organization for Economic Cooperation and Development (OECD).

Meanwhile, The Guardian reports:

Britain has refused to allow Israel’s Mossad secret service to send a representative back to the country’s London embassy following the row over the killing of a Hamas operative by agents using forged UK passports.

Israel’s Yediot Aharonot newspaper reported yesterday that the Foreign Office is digging in its heels because Israel is refusing to commit itself not to misuse British passports in future clandestine operations.


OECD is ushering Israel in too easily

Seth Freedman writes:

Despite all the diplomatic disquiet over Israeli policy towards the Palestinians, actions speak far louder than words when it comes to Israel’s international status. In May, the country seems set to be ushered into the OECD, following years of campaigning from successive Israeli governments. Such a move would be another step in welcoming Israel in from the cold, and demonstrates certain states’ willingness to overlook Israel’s questionable behaviour as an occupier in favour of enhanced fiscal and political ties.

In January the OECD’s incumbent secretary general implied that Israel’s admission is all but guaranteed, and there seems little objection to the decision from the organisation’s 30 member states. For Israel’s part, accession to the OECD is of great advantage, both in terms of global prestige and practical economic benefits. Israel’s credit rating will be upgraded as a result, and Israeli firms will find it much easier to raise capital on the back of the vote of confidence issued by the OECD’s leadership.

The only fly in the ointment is a dispute over information submitted by Israel to the OECD as part of its application for membership. Data provided by Israeli officials included figures related to Israel’s settler population, which contravenes OECD policy not to take account of a state’s economic activity beyond its recognised borders. A leaked report reveals discord among OECD statisticians, who maintain that the data should either include everyone residing in the West Bank – Palestinians as well as settlers – or no one at all.

The row has the potential to derail Israel’s acceptance to the OECD because revamped numbers could leave Israel short of the organisation’s stringent entry criteria. However, according to the report, the proposed solution allows Israel to first gain membership to the OECD, and then be granted a year’s extension to submit new figures – by which point Israel’s status as a fully-fledged member will grant it the power to veto demands for updated statistics.